Bitcoin dropped. Now what?
Hello Everyone,
Bitcoin dropped. I have been calling for a drop to around $45,000 for a few weeks now. My analysis on every chart has always stated that we needed to pay attention to the waning buying momentum and bearish price action on the monthly, weekly, and daily charts.
Now what? Well, I think the first thing we need to do is relax. These moves are healthy and helps the bull market long term. Before you possibly fomo into a trade or you’re looking to enter at a lower price, lets go over some technical analysis.
1. Bitcoin’s 4-hour timeframe is showing a dead cat bounce upwards from the previous drop. This is when bearish price action takes place as price is moving back upwards to retest an area of resistance with volume going down. If you are currently in and looking to exit, I would sell in the Dead Cat Bounce Zone.
2. The day timeframe is showing that we have broken to the downside on the 3 month long Ascending wedge. This could indicate a further move down as the trend has changed.
3. Bitcoin’s weekly chart is showing buying momentum waning and short-term charts are giving this more validity with bearish price action and breaking to the downside of our ascending wedge.
4. Daily MACD is showing increasing selling momentum as Weekly MACD is showing decrease buying momentum. This tells me that there is a high possibility of 1-2 weeks of downward movement. Maybe longer.
5. Daily price action was reflecting bearish and now volume has come in and bitcoin has dipped. This gives more validity to a short term downside.
6. Bitcoin has closed below the 50MA on the daily chart for the first time since October. This suggests that it may continue down to test the 100MA or possibly the 200MA support lines.
With all of the bearish things talked about, bitcoin is still in a bull market. Bitcoin has not tested a single weekly moving average when back in 2017 bitcoin danced along the 20 and 50 weekly moving average several times by April. I believe we are overdue for a “bounce” off a weekly moving average, the first being the 20MA which is around $45,000. Bitcoin has also seen 6 green monthly candles in a row. Bitcoin could use a red month or so.
In my opinion, I would not consider a buy until we retest $53,000. This would establish a possible double bottom pattern which is bullish and might be a good stronghold for heavier buyers moving forward. My overall price target for buying is $45,000.
As always, be patient, have risk management, and good luck trading!
Bitcoin dropped. I have been calling for a drop to around $45,000 for a few weeks now. My analysis on every chart has always stated that we needed to pay attention to the waning buying momentum and bearish price action on the monthly, weekly, and daily charts.
Now what? Well, I think the first thing we need to do is relax. These moves are healthy and helps the bull market long term. Before you possibly fomo into a trade or you’re looking to enter at a lower price, lets go over some technical analysis.
1. Bitcoin’s 4-hour timeframe is showing a dead cat bounce upwards from the previous drop. This is when bearish price action takes place as price is moving back upwards to retest an area of resistance with volume going down. If you are currently in and looking to exit, I would sell in the Dead Cat Bounce Zone.
2. The day timeframe is showing that we have broken to the downside on the 3 month long Ascending wedge. This could indicate a further move down as the trend has changed.
3. Bitcoin’s weekly chart is showing buying momentum waning and short-term charts are giving this more validity with bearish price action and breaking to the downside of our ascending wedge.
4. Daily MACD is showing increasing selling momentum as Weekly MACD is showing decrease buying momentum. This tells me that there is a high possibility of 1-2 weeks of downward movement. Maybe longer.
5. Daily price action was reflecting bearish and now volume has come in and bitcoin has dipped. This gives more validity to a short term downside.
6. Bitcoin has closed below the 50MA on the daily chart for the first time since October. This suggests that it may continue down to test the 100MA or possibly the 200MA support lines.
With all of the bearish things talked about, bitcoin is still in a bull market. Bitcoin has not tested a single weekly moving average when back in 2017 bitcoin danced along the 20 and 50 weekly moving average several times by April. I believe we are overdue for a “bounce” off a weekly moving average, the first being the 20MA which is around $45,000. Bitcoin has also seen 6 green monthly candles in a row. Bitcoin could use a red month or so.
In my opinion, I would not consider a buy until we retest $53,000. This would establish a possible double bottom pattern which is bullish and might be a good stronghold for heavier buyers moving forward. My overall price target for buying is $45,000.
As always, be patient, have risk management, and good luck trading!
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